Options Action: Predicting the Housing Bottom?

When big bets get placed, the options market is usually where you see the activity first.

Mike Khouw of Cantor Fitzgerald spotted a big wager Thursday. There was a "substantial" opening seller of the Oct. 14 puts on Lennar Corp.

***MIKE'S TRADE****Sell Oct. 14 puts at 60 cents

Khouw also likes this trade because selling the put yields over 4% in the next 37 days before expiration. Of course the downside risk is that you must get long Lennar at $13.40 (if the put option is exercised) but Khouw considers that a good entry point on a stock that could be bottoming out.

Options Action

Are options pointing to a housing bottom? Insight with Mike Khouw, Cantor Fitzgerald.

Learn more about this trade, watch the video now!

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For Joe TerranovaTerranova is chief market strategist of Virtus Investment Partners, LTD.Virtus Investment Partners own more than 1% of (ABAX)Virtus Investment Partners own more than 1% of (ALK)Virtus Investment Partners own more than 1% of (AMKR)Virtus Investment Partners own more than 1% of (CASS)Virtus Investment Partners own more than 1% of (CSVI)Virtus Investment Partners own more than 1% of (IGE)Virtus Investment Partners own more than 1% of (LDR)Virtus Investment Partners own more than 1% of (LPHI)Virtus Investment Partners own more than 1% of (MGRC)Virtus Investment Partners own more than 1% of (NRCI)Virtus Investment Partners own more than 1% of (DBV)Virtus Investment Partners own more than 1% of (XLB)Virtus Investment Partners own more than 1% of (XLP)Virtus Investment Partners own more than 1% of (XLY)Virtus Investment Partners own more than 1% of (XLF)Virtus Investment Partners own more than 1% of (XLI)Virtus Investment Partners own more than 1% of (XLU)Virtus Investment Partners own more than 1% of (SUBK)Virtus Investment Partners own more than 1% of (WDFC)Virtus Investment Partners own more than 1% of (YDNT)Virtus Investment Partners own more than 1% of (DLUEY)Virtus Investment Partners own more than 1% of (DRYS)

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